Bulgaria to provide EUR 6bn in guarantees under EMS

Bulgaria to provide EUR 6bn in guarantees under EMS

Bulgaria will provide EUR 6.09 billion in guarantees under the EUR 700 billion new bail-out scheme of the European Union, the European Stability Mechanism (ESM), which will become operational as of 2013, daily Sega reported on Sunday.

Additionally, the country will need to contribute about EUR 700 million to the scheme's capital of EUR 80 billion.

The funds will be set aside as part of Bulgaria's obligations to the new pact for the euro, the Euro-Plus Pact, which was backed by prime minister Boiko Borissov at the European Council meeting in Brussels on 24 and 25 March.

Apart from the 17 euro zone states, the mechanism was also joined by Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania. Four other European states, namely the UK, Hungary, the Czech Republic and Sweden, decided to opt out from the pact.

Although Bulgaria is not a member of the euro zone, the new pact will allow the country to benefit from the mechanism in case it seeks loans on the international markets. ESM will be AAA-rated, meaning that interest rates on guaranteed loans provided under the scheme will be extremely favourable. /Source: Dnevnik/

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